Hungry Food Industry, Fighting to Capture the 2.5 Million Vegan Market

1~2% Growth Trend Since 3 Years Ago
Effectively Halted Considering Inflation Rate

Focus on Healthy and Sustainable Foods
30+ Varieties Using Nongshim Alternative Meat
CJ CheilJedang Vegan Dumplings and Kimchi
Shinsegae Food and Pulmuone Launching One After Another

Overseas Market Approaching 30 Trillion Won by 2025
Export Expansion to Americas, Europe, and Halal Markets

[Asia Economy Reporter Seungjin Lee] As growth in the domestic food market slows down, the food industry is targeting "vegan" as a new source of growth. Despite the domestic total fertility rate being the lowest in the world at 0.8 and forecasts predicting a continuous population decline, the number of vegetarians is increasing, leading to the judgment that it can become a future growth engine. In particular, plans are underway to target the overseas vegan market by combining K-Food with vegan products.

Food Industry Growth Stalls

On the 29th, it was revealed that the domestic food industry’s growth has significantly slowed due to the prolonged low birthrate. Major food companies experienced a temporary growth last year as demand for food at home increased due to COVID-19, but this year they have either seen negative growth or a sharp decline in growth rate.

CJ CheilJedang’s food business division recorded sales of 8.9687 trillion KRW last year, a 10% increase compared to 2019. This was due to a significant increase in home meal consumption caused by COVID-19, combined with some panic buying demand. However, as of the first half of this year, the sales growth rate dropped sharply to 1% compared to last year. Nongshim recorded sales of 1.9644 trillion KRW last year, a 9.1% increase from the previous year. But as of the first half of this year, sales fell 8.4% year-on-year to 918.8 billion KRW. If this trend continues, total sales for this year are expected to return to 2019 levels.

According to the Ministry of Agriculture, Food and Rural Affairs’ "2021 Food and Dining Statistics," total sales in the food manufacturing industry grew at an average annual rate of around 3% from 2015 to 2017, but growth slowed to 1-2% from 2018 onward. Considering inflation rates, growth has effectively stalled.

Flood of Vegan Products

As growth in the food industry slows, the food sector is accelerating the launch of vegan products this year. Interest in healthy and sustainable foods has increased since COVID-19, leading to a rise in consumers seeking vegan products. The domestic vegetarian population, which was 150,000 in 2008, is estimated to have grown to 2 million last year and 2.5 million this year.

Among domestic food companies, Nongshim holds the largest number of vegan products. Using alternative meat independently developed by Nongshim Research Institute and Taekyung Nongsan, they have launched about 30 products. Nongshim plans to open a vegan brand restaurant named "Veggie Garden" at Jamsil Lotte World Mall.

CJ CheilJedang recently entered the vegan market as well. CJ CheilJedang introduced a plant-based food specialty brand called "Plantable" (Plant + Table) and launched "Vegan King Dumplings" and "Vegan Kimchi."

Hyundai Green Food signed an exclusive domestic sales and distribution contract with Canadian vegan food company "Daiya." Earlier, Shinsegae Food has been conducting alternative meat research and development (R&D) since 2016 and launched "Better Meat" in July this year. Pulmuone, which declared itself a leading company in plant-based foods, recently released "Korean-style alternative meat" products tailored to Korean tastes.

Targeting the 30 Trillion KRW Global Market

The food industry is focusing on overseas markets. Unlike the domestic market, which is still in the formation stage, overseas markets have already formed a considerable scale. According to Grand View Research and the Korea Rural Economic Institute, the global vegan market, which was valued at $12.7 billion (about 15 trillion KRW) in 2018, is expected to grow to $24.1 billion (about 28.6 trillion KRW) by 2025.

CJ CheilJedang launched Plantable products simultaneously in Australia and Singapore along with the domestic launch. Next year, they plan to expand the product lineup and export to the Americas, Europe, and halal (Muslim certification) markets. They expect vegan products to grow rapidly, leveraging the already popular overseas brand "Bibigo."

Nongshim Veggie Garden is also accelerating its overseas market expansion. It has entered the U.S. and European markets and is reportedly showing steady growth in the UK. Daesang recently launched 14 new global-exclusive products, including five types of kimchi, six types of sauces such as gochujang and ssamjang, and three types of hot sauces. The "Mild Kimchi," gochujang, and ssamjang are vegan products without animal ingredients.

An industry insider said, "The vegan market is one of the few markets with growth potential in the food industry, where the overall market size is expected to shrink," adding, "The industry plans to accelerate the expansion of the domestic vegan market through the launch of vegan products while targeting overseas markets as a growth engine."